AT&T’s cold view of fixed-wireless access (FWA) services continues to thaw as it’s beginning to see warming attention from consumers and, more importantly, from the more fiscally consistent enterprise market.

CEO John Stankey told investors during the carrier’s second-quarter earnings call that AT&T’s recently launched Internet Air product was “performing well.”

“We still have a little bit of scaling to do. I'm not quite satisfied with the self-install rates yet on it, but that's not problematic stuff, that's typical when we're kind of scaling the product and putting it out there. ... We'll work through those things as we always do,” Stankey said. “The foundation is there to use it the right way. I'm excited about having that tool.”

Stankey’s excitement was also financial, as he noted the FWA “tool” was gaining traction in the enterprise space and would allow the carrier to trim costs from other parts of its business.

“I like the product of the business segment and we’re certainly having some success with that,” Stankey said. “It’s going to be key for us in certain parts of our consumer segment as we move through the next phase of our cost-reduction efforts. It is a means for us to begin finding a good catch to shut down other infrastructure and still serve customers. We will use it surgically and selectively — that will help us both on the cost side as well as [for] retaining valuable customers. [We're looking for] where we think we can have the right kind of network capacity that will support the product going forward.”

Stankey also noted that the carrier’s FWA product could meld with the federal government’s financial-backed push to expand broadband coverage. This is being conducted through the National Telecommunications and Information Administration’s (NTIA) Broadband Equity, Access and Deployment (BEAD) program, which is part of the federal government’s $65 billion Infrastructure Investment and Jobs Act (IIJA).

The BEAD program recently allocated $42.5 billion to all 50 states, the District of Columbia and five U.S. territories: American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. Allocations are based on data showing areas that either lack broadband access or have access with speeds of less than 100 Mb/s on the downlink and 20 Mb/s on the uplink.

“There will be some parts of the United States that are best served by fixed wireless, at least, I believe that they will be best served by fixed wireless,” Stankey said. “As I move around different states, I think there are some states who believe that's the case. And there are some states that are looking at how do you get as many people on the internet as quickly as possible at the highest economic return. And those states that have that point of view, I think, will probably support fixed-wireless awards.”

Industry observers have noted they expect most of these funds to make their way toward fiber-based broadband deployments, though some could help fund FWA systems.

Tammy Parker, principal analyst at GlobalData, wrote in a report last year that while she expects fiber to be prioritized over “other technological approaches … fixed wireless and satellite solutions will most certainly need to be considered as part of the technology mix because it is not feasible to deploy fiber to many of the unserved and underserved areas that are supposed to be prioritized under BEAD.”

This FWA expansion could also spill into increased enterprise support. Stankey noted that consumer-focused FWA usage has been growing substantially based on “households that tend to be pretty bandwidth-intensive, doing a lot of entertainment streaming, growing consumption at 30% and 40% per year.”

“You don't see those kind of dynamics showing up in some of the small business and lower-end of the midsize market, and fixed wireless is a solution for those customers that can use that kind of service, especially when they need to marry it with mobile services to complement their business. [It] is a very attractive place for us to be thinking about using the product and the infrastructure, and I like the yields on that,” Stankey said.

This aligns with Stankey’s past comments questioning the financial viability of FWA services.

“There are many businesses that have usage profiles where I believe fixed wireless bundled in with other wireless services is a very durable offer and it will be durable for a long period of time to come,” Stankey said of AT&T's FWA plans during the carrier’s Q1 earnings call. “There are certain consumer segments where that’s durable, but it’s not most consumer segments, in my view.”

AT&T does not break out FWA-based customer growth, but its rivals are seeing significant movement for their more mature offerings.

Verizon earlier this week said it added 384,000 FWA connections during the second quarter, which was down slightly from what it reported during Q1, but a 50% increase from what it added during the second quarter of 2022. The carrier counted nearly 2.3 million FWA customers at mid-year, which was nearly halfway to its target of up to 5 million FWA customers at the end of 2024.

CEO Hans Vestberg told investors that this growth is allowing the carrier to raise service pricing to help monetize the service. “We now have an opportunity to segment the fixed-wireless access market based on price and speed tiers so that our customers can choose the service that best suits them,” he explained.

Verizon CFO Tony Skiadas added that the operator was looking for similar fixed-wireless access connection growth for the operator’s current third quarter.

Verizon’s FWA growth has so far also been limited to 70 larger markets where the operator has put its C-band spectrum assets to work. Vestberg said the operator would look to expand the reach of that service to new markets as it gains broader access to that spectrum.

“The next step is going to be much more suburban and rural, and that’s a great opportunity because usually there are even less options for customers in those areas,” Vestberg said.

T-Mobile US, which is scheduled to release Q2 earnings on Thursday, added an industry-leading 600,000 FWA connections during the first quarter of this year, pushing its connection base to 3.2 million FWA connections. The carrier has stated that it plans to have more than 7 million FWA connections by 2025.

AT&T’s relatively immature position in the fixed-wireless access market led to fewer network capacity questions from investors, but the carrier did tout the ongoing reach and depth of its 5G network. This includes that network now reaching approximately 290 million potential customers and its deep mid-band spectrum-enabled 5G service now reaching more than 175 million potential customers.

AT&T invested $5.9 billion in its operations during the quarter, pushing its half-year amount to $12.4 billion. That investment will drop by about $1 billion for the second half of 2023.

CFO Pascal Desroches noted that the carrier would be “past peak investment as we exit this year. … Clearly we don’t expect to be at the levels of capital you’ve seen us invest in 2022 and 2023.”

This sentiment echoed that of Verizon, which is also winding down its mid-band spectrum deployment investment. The carrier said it remains on track to spend up to $19.25 billion this year, but that next year’s spend will be closer to $17.5 billion.

Ericsson reported a 42% drop in spending from North America operators during its fiscal Q2 compared to the same period last year. The vendor attributed this to the lower operator capex.

Ericsson CEO Börje Ekholm attempted to apply logic to this challenge, noting networks will increasingly be challenged by growing demand.

“We also see that the data traffic in the network continues to grow, and we also start to see new type of use cases, call it fixed-wireless access, but we're also starting to see enterprise use cases,” Ekholm told investors. “So data traffic is growing. And with the operator's desire to meet users' expectations for network quality, but adding on cost and energy efficiency … we see that will stimulate further investments.”

Stankey, at least for the moment, is demurring from that investment need.

"We're really satisfied that we've got the right kind of machine to build the way we want to build and the network is performing in a great way. And all of our indicators back from our customers is they're very satisfied with the level of experience they have," Stankey said. "So everything, I think, feels pretty good about that right now."